Paul Diegel, Carrie Bancroft, Rhiannon Johnson Rhiannon Johnson Unilever Indonesia: The Oxfam Perspective

Shared Vision, Different Perspectives Vision  Unilever and Oxfam share a commitment to global poverty reduction Differences:  Unilever: CSR reporting can be reviewed internally  Oxfam: CSR reporting requires external review for accountability Solution:  Four independent Indonesian researchers and one report author were jointly chosen by both Vision  Unilever and Oxfam share a commitment to global poverty reduction Differences:  Unilever: CSR reporting can be reviewed internally  Oxfam: CSR reporting requires external review for accountability Solution:  Four independent Indonesian researchers and one report author were jointly chosen by both

Stakeholders Represented  Unilever / Precor  Oxfam  Suppliers  Community / Consumers  Distributors Not Represented  Primary Producers  Contracting Workers  Other Multinationals  Local Competitors  Environment  Other NGOs Represented  Unilever / Precor  Oxfam  Suppliers  Community / Consumers  Distributors Not Represented  Primary Producers  Contracting Workers  Other Multinationals  Local Competitors  Environment  Other NGOs

Decision Making  Different perspectives  Mixed project team  MOU, TOR, Principles  Data from >400 people  Limited data: supply side  Discussion to agreement  Mutual understanding  Differing viewpoints described  Different perspectives  Mixed project team  MOU, TOR, Principles  Data from >400 people  Limited data: supply side  Discussion to agreement  Mutual understanding  Differing viewpoints described

Aspects of Justice Mainly restorative in creating a more competitive business environment  Standards for pay scales, indigenous managers, laborer age  Build supplier infrastructure  Philanthropy  Public stand against corruption  Actions that help Unilever + help Indonesian businesses compete globally Mainly restorative in creating a more competitive business environment  Standards for pay scales, indigenous managers, laborer age  Build supplier infrastructure  Philanthropy  Public stand against corruption  Actions that help Unilever + help Indonesian businesses compete globally

UI Impact on Indonesia Effects on Supply Chain  Providers  Contract Workers Effects on Demand  Customers  Local Markets Effects on Environment  Sachet production / consumption  Production and supply Effects on Supply Chain  Providers  Contract Workers Effects on Demand  Customers  Local Markets Effects on Environment  Sachet production / consumption  Production and supply

Change in Oxfam & UI Greater understanding between Oxfam & UI  Commitment to poverty reduction & development  Cooperative effort possible  Discussion & dialogue → new insights  Oxfam: recognizes each multinational should be viewed on its own merits Greater understanding between Oxfam & UI  Commitment to poverty reduction & development  Cooperative effort possible  Discussion & dialogue → new insights  Oxfam: recognizes each multinational should be viewed on its own merits

UI Business Relationships  Focused on UI needs  Builds capacity to meet needs  Competitive, power imbalance  Built reliable infrastructure  Local relationships economical  Uninvolved beyond direct links  Focused on UI needs  Builds capacity to meet needs  Competitive, power imbalance  Built reliable infrastructure  Local relationships economical  Uninvolved beyond direct links

Cultural Influnces on Business Practices Corporate worldwide guidelines vs. local customs UI followed some local customs:  Contract labor and gender roles  Unique local distribution and retail …and broke out of others:  Government corruption  Improved wages  Products in smaller packages How to break cultural barriers? Is that the company’s responsibility? Corporate worldwide guidelines vs. local customs UI followed some local customs:  Contract labor and gender roles  Unique local distribution and retail …and broke out of others:  Government corruption  Improved wages  Products in smaller packages How to break cultural barriers? Is that the company’s responsibility?

Impact of UI on Indonesia Positive Impacts  Greater wealth creation for farmers, some contractors  Better working conditions for some contractors  Creation and placement of affordable products for poor people (sachets)  Proof of the possibility of genuine collaboration between a multinational and an NGO Concerns  Disparity between direct employees and contractors in the supply chain  Environmental impacts of excess packaging  Marketing to poor people raises many ethical questions  UI potential market consolidation  Farmers’ increasing dependence on UI Positive Impacts  Greater wealth creation for farmers, some contractors  Better working conditions for some contractors  Creation and placement of affordable products for poor people (sachets)  Proof of the possibility of genuine collaboration between a multinational and an NGO Concerns  Disparity between direct employees and contractors in the supply chain  Environmental impacts of excess packaging  Marketing to poor people raises many ethical questions  UI potential market consolidation  Farmers’ increasing dependence on UI

Implications & Learnings  Private Sector: “Important engine of development”  Business benefit integrated  Fine line to balance  Check with outside perspective  Interpretation of standards  Ensure diverse economy  More research needed  Private Sector: “Important engine of development”  Business benefit integrated  Fine line to balance  Check with outside perspective  Interpretation of standards  Ensure diverse economy  More research needed